Consumer NZ unveil top personal finance tips for 2022

As we start the new year, Consumer NZ has put together their top personal finance tips for 2022.

Gemma Rasmussen, Head of Communications and Campaigns at Consumer NZ, said that despite many people feeling financially sensitive after Christmas, the New Year is a great time to get the bank balance back in shape.

“Often after a period of more intense festive spending, people wince to look at their bank accounts. So this may seem like a good time for people to think about what they would like to achieve financially in the coming year, ”said Rasmussen.

While it can be intimidating to look at a spreadsheet when you want to hit the beach, the perks were well worth it, she said.

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Avoid bank charges

Consumer NZ’s first tip was to take a look at your banking setup to make sure you weren’t wasting money unnecessarily on unnecessary charges.

“It can be as simple as asking for fee waivers and haggling with your bank to see what they’re willing to offer to keep you as a customer,” Rasmussen said.

Two key ways to avoid bank charges were to go for a transaction account with no basic fees or transaction fees, and try to prioritize online banking, as in-branch transactions sometimes came with high fees. , she said.

The fees are important because they provide lucrative income for banks, she said.

Rasmussen pointed out that in 2020, banks made $ 2.3 billion from the fees and commissions they charged customers, to prove how important it is for the consumer to get the fees correct.

Consider changing banks

Choosing a different bank for a different purpose could be a great way to improve your personal finances, Rasmussen said.

“You don’t have to use one bank for all of your financial needs. You can have one bank for your checking account and another for a low interest rate for a credit card, ”she said.

“When you look at your personal finance setup, ask yourself, ‘Is there a more attractive interest rate elsewhere? Can my bank change my account to a free option? “

Establish a budget

If you want to fine tune your finances, having a regular budget is crucial, said Rasmussen.

“Whether it’s an Excel spreadsheet or a budgeting app, it’s important to track your spending. Being transparent about where your money is going can help you optimize your spending and help you achieve your financial goals, ”she said.

If you wanted to increase your budget even more, it was a good idea to divide the expenses into different categories to get the most out of it, Rasmussen said.

“There are generally three types: needs, regular expenses and wants. Your regular expenses and wants are usually where you can save the most money, ”she said.

A Consumer NZ study conducted in October last year found that 15 percent of people had no savings and 27 percent were worried about their level of savings, so it was important for many people to keep their budgets under control at the start of the New Year, a said Rasmussen.

Buy smarter

As the New Year brings a busy shopping season, consumers should think twice before racking up interest-free purchases, Rasmussen said.

“These purchases can be a debt trap, with consumers paying installation and service charges that add 5-16% to the final purchase price.”

“In addition to the fee to set up the contract, most interest-free finance agreements cost you an annual service fee. The annual fee means the longer you take to pay for your purchase, the more you’ll pay overall, ”she said.

Before signing up for a debt-free purchase, it was important to pull out the calculator and make sure the deal wasn’t a dud, she said.

Changing utilities could save you hundreds

With the cost of living rising, it was important that people get the best deal on their utilities, Rasmussen said.

“You can potentially save hundreds by switching providers. Staying static with energy, insurance, and mobile plans can end up costing more in the long run. There isn’t much to be gained from being a loyal customer, ”she said.

Data from Consumer NZ revealed that household utility costs are one of the top financial concerns for New Zealanders.

To keep costs manageable, Rasmussen recommended that consumers use apps from product providers like Powerswitch to find the cheapest electricity and gas plans.

Data from New Zealand consumers showed that an average household could save around $ 380 in energy bills if they changed electricity providers.

Insurance has also been expensive for households. A recent Consumer NZ survey of home and content insurance found that there was a difference of over $ 2,000 between the cheapest and the most expensive comparable insurance policies.

Rasmussen recommended that people make sure they get the best deal on each of their bills.

“There are big savings to be made if you shop around. It may take a few hours to sit down and review various plans and accounts, but the start of the year can be a good time to make sure your finances are at their best, for a smoother fiscal year ahead, ”said Rasmussen.